Plum Creek Timber Company, Inc. Reports Results For Second Quarter 2012

We present Adjusted EBITDA as a supplemental performance measure because we believe it facilitates operating performance comparisons from period to period, and each business segment’s contribution to that performance, by eliminating non-cash charges to earnings, which can vary significantly by business segment. These non-cash charges include timber depletion, depreciation of fixed assets and the basis in lands sold. We also use Adjusted EBITDA as a supplemental liquidity measure because we believe it is useful in measuring our ability to generate cash. In addition, we believe Adjusted EBITDA is commonly used by investors, lenders and rating agencies to assess our financial performance.

A reconciliation of Adjusted EBITDA to net income and net cash from operating activities, the most directly comparable U.S. GAAP performance and liquidity measures, is provided in the following schedules:

		Six Months Ended June 30, 2012 (In Millions)
						Depreciation, Depletion				Basis of Real				Adjusted
		Operating Income				and Amortization				Estate Sold				EBITDA
By Segment
Northern Resources		$	10			$	13			$	—			$	23
Southern Resources		43				33				—				76
Real Estate		59				1				75				135
Manufacturing		13				7				—				20
Other		9				—				—				9
Other Costs and Eliminations		(30		)		—				—				(30		)
Other Unallocated Operating Income (Expense), net		1				—				—				1
Total		$	105			$	54			$	75			$	234
Reconciliation to Net Income (1)
Interest Expense		(69		)
(Provision) / Benefit for Income Taxes		1
Equity Earnings from Timberland Venture		28
Net Income		$	65
Reconciliation to Net Cash Provided By Operating Activities
Net Cash Flows from Operations														$	89
Interest Expense														69
Amortization of Debt Costs														(2		)
Provision / (Benefit) for Income Taxes														(1		)
Working Capital Changes														2
Distribution from Timberland Venture														(28		)
Deferred Income Taxes														1
Deferred Revenue from Long-Term Gas Leases														5
Timber Deed Acquired														98
Pension Plan Contributions														7
Other														(6		)
Adjusted EBITDA														$	234

		Six Months Ended June 30, 2011 (In Millions)
						Depreciation, Depletion				Basis of Real				Adjusted
		Operating Income				and Amortization				Estate Sold				EBITDA
By Segment
Northern Resources		$	10			$	11			$	—			$	21
Southern Resources		34				24				—				58
Real Estate		88				1				43				132
Manufacturing		9				6				—				15
Other		11				—				—				11
Other Costs and Eliminations		(30		)		1				—				(29		)
Other Unallocated Operating Income (Expense), net		1				—				—				1
Total		$	123			$	43			$	43			$	209
Reconciliation to Net Income (1)
Interest Expense		(70		)
(Provision) / Benefit for Income Taxes		(1		)
Equity Earnings from Timberland Venture		30
Net Income		$	82
Reconciliation to Net Cash Provided By Operating Activities
Net Cash Flows from Operations														$	157
Interest Expense														70
Amortization of Debt Costs														(1		)
Provision / (Benefit) for Income Taxes														1
Working Capital Changes														31
Distribution from Timberland Venture														(28		)
Deferred Income Taxes														(4		)
Deferred Revenue from Long-Term Gas Leases														(12		)
Other														(5		)
Adjusted EBITDA														$	209
(1) Includes reconciling items not allocated to segments for financial reporting purposes.

		Quarters Ended June 30, 2012 (In Millions)
						Depreciation, Depletion				Basis of Real				Adjusted
		Operating Income				and Amortization				Estate Sold				EBITDA
By Segment
Northern Resources		$	4			$	6			$	—			$	10
Southern Resources		22				18				—				40
Real Estate		29				1				12				42
Manufacturing		9				3				—				12
Other		4				—				—				4
Other Costs and Eliminations		(14		)		—				—				(14		)
Other Unallocated Operating Income (Expense), net		1				—				—				1
Total		$	55			$	28			$	12			$	95
Reconciliation to Net Income (1)
Interest Expense		(34		)
(Provision) / Benefit for Income Taxes		—
Equity Earnings from Timberland Venture		15
Net Income		$	36
Reconciliation to Net Cash Provided By Operating Activities
Net Cash Flows from Operations														$	83
Interest Expense														34
Amortization of Debt Costs														(1		)
Provision / (Benefit) for Income Taxes														—
Working Capital Changes														(28		)
Deferred Revenue from Long-Term Gas Leases														3
Pension Plan Contributions														7
Other														(3		)
Adjusted EBITDA														$	95
		Quarters Ended June 30, 2011 (In Millions)
						Depreciation, Depletion				Basis of Real				Adjusted
		Operating Income				and Amortization				Estate Sold				EBITDA
By Segment
Northern Resources		$	3			$	5			$	—			$	8
Southern Resources		15				12				—				27
Real Estate		50				1				24				75
Manufacturing		5				3				—				8
Other		4				—				—				4
Other Costs and Eliminations		(14		)		1				—				(13		)
Other Unallocated Operating Income (Expense), net		—				—				—				—
Total		$	63			$	22			$	24			$	109
Reconciliation to Net Income (1)
Interest Expense		(35		)
(Provision) / Benefit for Income Taxes		—
Equity Earnings from Timberland Venture		16
Net Income		$	44
Reconciliation to Net Cash Provided By Operating Activities
Net Cash Flows from Operations														$	81
Interest Expense														35
Provision / (Benefit) for Income Taxes														—
Working Capital Changes														1
Deferred Income Taxes														(1		)
Deferred Revenue from Long-Term Gas Leases														(5		)
Other														(2		)
Adjusted EBITDA														$	109
(1) Includes reconciling items not allocated to segments for financial reporting purposes.

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